Wednesday, December 21, 2011

Do we really need to punish the corrupt?

The axiomatic assumption in all the debates raging
in the Indian Parliament on the “Anti-Corruption Bill” has been “If you need to stem corruption, you need
to punish the corrupt"- and once this is said, we have all redirected
our efforts in fighting about how much punishment, who is to be punished, and
who will punish.

I mean seriously, in the heat of all the debate,
the basic premise of such a bill has remained unquestioned. Is it worth really
questioning this assumption in the first place? I mean, is it really true that
"punishing" the corrupt is the only way to "stem
corruption", and more importantly even if it is a way, is it the best way?

I am often drawn to this discussion of compensating
employees. Given a choice between a "performance
bonus" rewarding performance and a "non-performance penalty" - punishing non performance, I
would like to believe that employees are more likely to perform better if they
were rewarded for performing rather than being punished for non performance.

Imagine a hypothetical scenario where, a highway
toll charges INR 50 each time you use the highway. Additionally every time a
police inspector catches you violating a traffic rule, he immediately fines you
INR 50. Assuming you use the toll
everyday to work, you are paying INR 1500 towards toll charges. Let’s say you
bend the rules 5 days in a month, you are charged a fine of INR 250. But in a corrupt
environment, the police inspector collects just 25INR and pockets the rest to
himself and does not issue a receipt.

The Corrupt Driver now spends:

INR 1625
having defaulted the rule 5 times in a month

The Corrupt Policeman makes

INR 125,
running the risk of getting caught

The Highway makes

INR 1500 running the risk of an accident 5 times in a month

Alternatively, if the toll charges were raised to
INR100, but at the end of the month the
highway will wire you a “Bonus Reward” of INR 50 for each travel where you are
not caught for traffic indiscipline. If you are caught for an indiscipline, the
police fines you INR 100. The policeman is rewarded INR 50 for each time he
issues a receipt.

If there is a deviation from the traffic rule 5
times in a month,

The Driver now spends

INR 2250.... Realizes he could have earned a Bonus of
500 Rs had he not bend the rules, he will try that the next month

The Policeman now earns

INR 250 by properly issuing the receipt, and hence
he is likely to look out for deviations and catch rule benders and issue
receipts each time.

The Highway now earns

INR 2000 and also expect more compliance in the
future.

The basic demonstration here, observes that the
driver is more likely to follow rules when he realizes he will be rewarded in
the end. The Policeman is more likely to issue receipts when he knows he will
be rewarded for it at the end. The Highway makes just as much money or
more and enjoys a Corruption free
environment .

I am not proposing that the solution is very
simplistic or even that this can be extended all scenarios where corruption is
rampant. But is it worth spending time
on trying a cultural change where people see a gain in not being corrupt rather
than merely debating on "how to punish" "whom to Punish"
and "who will Punish"